Economic Survey 2024-25: A Comprehensive Analysis of India’s Growth Trajectory

Introduction

The Economic Survey 2024-25, tabled in Parliament by Union Finance Minister Nirmala Sitharaman on January 31, 2025, provides an in-depth analysis of India’s economic health, growth prospects, and policy recommendations. Amidst global uncertainties, the survey projects India’s real GDP growth at 6.4% for FY25, with a projected range of 6.3% to 6.8% for FY26, underscoring the resilience of the Indian economy.

This detailed review of the Economic Survey 2024-25 highlights key macroeconomic trends, sectoral performance, and strategic policy recommendations crucial for sustaining India’s growth momentum.

Macroeconomic Outlook: India’s Growth Story

1. GDP and GVA Growth

• The Economic Survey 2024-25 estimates India’s real GDP growth at 6.4% in FY25, aligning with the country’s long-term average.
• The Gross Value Added (GVA) growth is also projected at 6.4%, indicating balanced expansion across sectors.

2. Inflation Trends

• Retail inflation softened to 4.9% (April-December 2024), with a target to stabilize around 4% in FY26.
• The Economic Survey 2024-25 emphasizes the role of supply-side interventions in controlling inflation, particularly in food and fuel segments.

3. Investment & Capital Expenditure

• Capital expenditure grew 8.2% (July–November 2024), signaling the government’s continued push for infrastructure development.
• Private investment has also witnessed an uptick, supported by FDI inflows and policy reforms.

4. Exports & FDI Trends

• India’s overall exports increased by 6% YoY (April-December 2024), with services exports rising 12.8%.
• Gross FDI inflows surged 17.9% YoY, reaching $55.6 billion in the first eight months of FY25, reinforcing India’s attractiveness as an investment destination.
• The Economic Survey 2024-25 attributes this to PLI schemes, trade agreements, and a stable policy environment.

5. Forex Reserves & External Sector Stability

• India’s forex reserves stood at $640.3 billion (Dec 2024), covering 10.9 months of imports and 90% of external debt, ensuring strong external sector stability.

Sectoral Performance: Growth Across Industries

1. Agriculture & Allied Sectors

• Agriculture sector is projected to grow at 3.8% in FY25, with major contributions from horticulture, livestock, and fisheries.
• Kharif foodgrain production is expected to reach 1,647.05 LMT, an increase of 89.37 LMT from the previous year.

2. Industrial Growth & Services Sector Expansion

• The industrial sector is projected to expand by 6.2% in FY25, driven by manufacturing, construction, and mining.
• The services sector remains a major growth driver, with projected growth of 7.2%, led by financial services, IT, and real estate.
• India’s stock market capitalization-to-GDP ratio reached 136% (Dec 2024), significantly higher than China (65%) and Brazil (37%).

3. Infrastructure & Energy Developments

• Solar and wind power capacity addition increased 15.8% YoY (Dec 2024), reflecting India’s push towards renewable energy.
• Infrastructure investments remain a priority, with the Economic Survey 2024-25 stressing long-term capital infusion for roads, railways, and urban development.

Employment & Social Indicators

1. Declining Unemployment Rate

• The unemployment rate declined to 3.2% (2023-24) from 6.0% in 2017-18, reflecting job creation in various sectors.

2. Healthcare & Social Services Growth

• Government health expenditure increased from 29% to 48% (FY15-FY22), leading to a reduction in out-of-pocket health expenses from 62.6% to 39.4%.
• Social services expenditure grew at an annual rate of 15% (FY21-FY25), highlighting improved public welfare initiatives.

Key Policy Recommendations: Future Roadmap

1. Ease of Doing Business 2.0

• The Economic Survey 2024-25 calls for systemic deregulation, allowing businesses to operate with reduced compliance burdens and faster approvals.

2. Infrastructure Expansion

• The government plans to scale up infrastructure investments over the next two decades to sustain high economic growth.

3. MSME Sector Reforms

• The ₹50,000 crore Self-Reliant India Fund aims to provide equity funding to MSMEs, boosting entrepreneurship and innovation.

4. AI & Workforce Development

• The survey emphasizes a collaborative approach among the government, private sector, and academia to manage AI’s impact on jobs and economic productivity.

Conclusion: India’s Economic Resilience & Growth Prospects

The Economic Survey 2024-25 highlights India’s resilience amidst global economic challenges. With strong macroeconomic fundamentals, increasing FDI, declining unemployment, and policy-driven reforms, India is well-positioned for sustained growth.

As the government focuses on deregulation, infrastructure investment, AI development, and MSME growth, the Economic Survey 2024-25 lays a robust foundation for India’s economic future, reinforcing its position as a leading global economy.

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